Conservatives Want Restraints On I.R.S. Power Over Schools

Washington--Leaders of the nation's "New Right" warned President
Reagan last week that they would withdraw their support for federal
tuition tax-credit legislation if it fails to include language that
adequately protects private and religious schools from "harassment" by
the Internal Revenue Service (irs).

"If the Administration presents the right kind of bill, we will
support it," said Paul Weyrich, president of the Coalitions for
America, at a press conference sponsored by several conservative
groups, including the Moral Majority, the National Pro-Family
Coalition, and the Conservative Caucus. "If not, tuition tax credits
could be defeated as soundly as they were the last time they were
proposed."

The conservative leaders indicated that although they support the
President's decision not to grant tax credits to parents who send their
children to schools that discriminate on the basis of race, they want
to limit the authority of the irs to regulate the practices of private
schools.

The conservatives are concerned, they say, that the tax-credit
proposal might give the irs excessive authority to define and seek
remedies for discrimination in private schools.

Such broad authority, they said, might be construed as allowing the
irs to deny tax-exempt status to private schools that maintain racially
discriminatory policies on the basis of the school officials' religious
beliefs. They said they would support the bill only if it contained
language that would specifically prohibit the irs from interfering with
the schools' admissions policies.

"There is widespread concern throughout the private-school community
that tuition tax credits will open the door for additional harassment
and entanglement by the irs and other governmental agencies," said
Ronald S. Godwin, vice-president and chief operations officer of the
Moral Majority. "[We are] aware of this widespread concern, and we will
not support tuition tax credits if there are not sufficient safeguards
against irs harassment in the final version."

Separate Issue

Education Department officials have said, however, that the
tax-credit proposal is entirely separate from the issue of tax-exempt
status for private institutions. Tuition tax credits, they say, pertain
to families' personal income taxes, not to institutions' tax status, so
the question of exemptions need not be addressed in the bill.

Conservative leaders and federal officials have been at odds over
the tax-exemption issue for more than a decade.

Recently, the U.S. Supreme Court announced that it would settle the
question by hearing two cases regarding tax exemptions for Bob Jones
University and the Goldsboro (N.C.) Christian Schools, two educational
institutions that maintain discriminatory policies based on religious
beliefs.

Last January, the Reagan Administration, in a move it now concedes
was a major political embarrassment, announced that the irs did not
have the legal authority to withhold tax-exempt status from schools
that practiced racial discrimination and would no longer do so. The
Administration, reacting to heavy pressure from civil-rights and some
religious groups, quickly shifted its position and said it would ask
Congress to adopt legislation denying tax exemption to schools that
discriminate.

The President's bill, however, has not been acted upon in either the
House or the Senate. It is opposed both by liberals, who consider such
legislation unnecessary, and by conservatives, who believe it gives the
irs too much discretion over the practices of religious
institutions.

Withdraw Support

Mr. Godwin of the Moral Majority added, however, that the
conservative groups would also withdraw their support for the
tax-credit bill if it failed to contain a provision forbidding the
extension of tax benefits to parents who send their children to schools
that discriminate on the basis of race.

Robert E. Baldwin, executive director of Learn, Inc., a recently
cre-ated conservative education foundation, explained that the
organizations' two demands were not contradictory.

Although the conservative organizations oppose racial discrimination
in education, the federal government should not punish schools that
practice such policies by refusing to grant them tax-exempt status, Mr.
Baldwin said.

In order to decide which parents should be denied the tuition tax
credits, the government, he said, could require private schools to file
a statement or oath indicating that their schools do not discriminate
on the basis of race. Officials of schools that continued
discriminatory practices after filing such an oath could then be
prosecuted for perjury, he said.

Speakers at the press conference did not explain how the government
or the irs would be able to determine from federal income-tax forms
which parents should be denied the tax credit as a result of sending
their children to a school that discriminates.

President Reagan unveiled his long-promised plan to institute a
system of federal income-tax credits for parents who send their
children to private schools at last month's meeting of the National
Catholic Educational Association. (See Education Week, April 21,
1982.)

The President's proposal would provide parents with tax credits
equal to one half of tuition costs for each child in private school, up
to maximum credits of $100 per child in 1983, $300 in 1984, and $500 in
1985.

The President's tax-credit plan, however, has drawn little support
in either the House or Senate, and many observers give it only a
marginal chance of passing during the current legislative session.

Low-Priority Item

Senator Daniel Patrick Moynihan, Democrat of New York and an ardent
supporter of tax credits in the past, recently conceded that the
Congress probably will not have adequate time to act on the President's
bill. Senator Robert Dole, Republican of Kansas and chairman of the
Senate Finance Committee, has also announced that the tax-credit bill
will be a low-priority item for his panel.

Despite those predictions, Mr. Weyrich of the Coalitions for America
said that a tuition tax-credit bill would stand "a greater chance of
passage now than in any other time during the past 20 years."

"Private schools are opening now at a rate of at least four to five
per day," he said. "Before it was mainly the urban Catholics who pushed
hardest for this type of legislation, but now we're seeing support for
it in areas like the South where you used to see strong
opposition."

Mr. Weyrich also rejected the argument that members of Congress
would be hesitant to act on a controversial proposal as the tuition
tax-credit bill during an election year, saying, "I can't think of a
single politician who would vote against tax relief near election
time."

"I believe that, politically, it is possible to pass a piece of
legislation like this, especially if there is a great drive across the
country to see that it happens," he said. "And we plan to spearhead
that drive."

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